Dominion confirms preliminary negotiations with Swedish equipment makes; sources says Ericsson needs strategic tie-ups to avoid more job losses

Ericsson is holding merger talks with Spain’s Dominion, the latter announced on Wednesday, and is reportedly seeking other JV opportunities elsewhere in the world.

Dominion confirmed that it is "having preliminary conversations with Ericsson Group, in order to evaluate a potential joint venture on the development and maintenance of telecommunication infrastructure networks."

The Spanish IT solutions and services company issued the statement following media reports to that effect.

"This potential joint venture, if a transaction is completed, would be carried out at the level of current Dominion’s subsidiary in the business," Dominion said, adding the usual caveat that there can be no guarantees a deal will materialise.

Earlier on Wednesday, Reuters cited an unnamed source as saying that Ericsson is keen to merge Dominion with Abentel, the Spanish fibre services company it acquired last year, and other network maintenance units with regional players "to deconsolidate the workforce and costs stemming from those businesses."

Local sources told the newswire that Abentel’s 550 staff in Spain could be at risk if it fails to broker a merger there. The vendor is expected to lay off 30% of its Spanish workforce, with cuts coming in networks and other areas aside from managed services, the newswire said. That number could be higher if an Abentel deal does not materialise, it said.

Reuters also quoted a source as saying the vendor’s 400 planned job cuts in Italy could also increase if it does not manage to negotiate a strategic tie-up in the country. Ericsson lost a managed services deal with Wind Tre at the end of last year and is reviewing its strategic options for the business, the source said.